Office demand remained low resulting in a 2% average quarter-on-quarter drop in rental rates.

No major office buildings were delivered in the first quarter.

The Omega Towers on Al Reem Island and the ADIB HQ on Airport Road are due for handover before the end of the 2018 (195,000 square meters), but only around 70,000 sqm of these are likely to be brought to market with the remainder being delayed to 2019.

The delivery of additional supply at a time of weak demand as well as ongoing corporate consolidations are expected to place further downward pressure on rents over the next 12 months, particularly within secondary buildings i.e., not in prime locations.

Prime office rents in the first quarter of 2018 registered at around $500 on average (sqm per annum), down 1.6% from the first quarter of 2017.

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